Tete Steel and Vanadium Project, Mozambique
- The Company is developing a world class, 759Mt vanadium-rich, iron ore resource in Mozambique’s Tete province into a long term, low-cost 500,000 tonne per annum (‘ktpa’) steel plant and 2,500 tonne per annum Ferro-vanadium refinery (the ‘Tete Project’).
- The Project benefits from its strategic location close to abundantly available raw materials and the fast growing, import-dependent steel market in Mozambique and neighbouring land-locked countries.”.
- As a first mover in the region, The Company offers an ideal entry point for a strategic investor seeking to establish and execute a Sub-Saharan African steel strategy.
- Progress is well advanced, with a Definitive Feasibility Study (‘DFS’) recently completed by the Metallurgical Corporation of China (‘MCC’). Pilot scale test work confirmed that locally-available thermal coal can be used to pre-reduce Baobab iron ore concentrate to a metallisation rate in the range of 50% to 60%.
- The World Bank Group’s International Finance Corporation (‘IFC’) has been a participatory co-investor at the asset level since 2009 and owns a 9% interest in the Tete Project.
The Tete Project has access to locally available raw materials
- Captive resource of 759Mt of iron ore at a grade of 34% Fe and 0.35% V2O5, supporting production of 500ktpa of rebar, wire rod and merchant bar (‘rebar’) and 2.5ktpa Ferro-vanadium for more than 100 years, with potential to upscale in line with increasing demand in both Mozambique and the surrounding target markets, including Zimbabwe, Zambia, Malawi and South Africa.
- Local coal available from the nearby massive Tete-Moatize coal fields at attractive prices given that producers such as Vale and ICVL are unable to economically export the thermal coal proportion.
- The development of captive coal-fired power (2 x 100MW) ensures reliable, low-cost power supply with an average cash cost of USD0.013/kWh.
- Internal co-generation of 55MW of power supply further reduces the overall cost of electricity and cash cost of production.
- Dolomite and limestones deposits located nearby within Baobab’s mining concession, with abundant water supply from the adjacent Revuboé River.